Sensex, Nifty trade with sharp losses; PSU Bank shares drop

The domestic equity benchmarks remained under pressure in mid-afternoon trade with sharp losses as investor sentiment stayed cautious due to uncertainty over the reopening of the Strait of Hormuz and crude oil prices rising above $100 per barrel. Investors are also closely monitoring Q4 earnings for further cues. The Nifty traded below 24,250 mark.

PSU Bank shares witnessed profit booking after rallying in the previous four trading sessions.

At 14:25 IST, the barometer index, the S&P BSE Sensex declined 717.65 points or 0.92% to 77,780.63. The Nifty 50 index slumped 160.50 points or 0.68% to 24,210.15.

In the broader market, the BSE 150 MidCap Index shed 0.25% and the BSE 250 SmallCap Index fell 0.33%.

The market breadth was negative. On the BSE, 1,754 shares rose and 2,441 shares fell. A total of 192 shares were unchanged.

The NSE's India VIX, a gauge of the market's expectation of volatility over the near term, rose 0.99% to 18.48.

Economy:

The HSBC Flash India PMI Composite Output Index was rose to 58.3 in April from the final reading of 57.0 in March. The latest reading signalled a sharp expansion in overall business activity, remaining well above its long-run average.

HSBC Flash India Services PMI Business Activity Index stood at 57.9 in April 2026 compared with 57.5 in March 2026.

Meanwhile, HSBC Flash India Manufacturing PMI Output Index climbed to 59.1 im April 2026 compared with 55.7 in March 2026. Overall manufacturing business conditions also strengthened, with the HSBC Flash India Manufacturing PMI rising to 55.9 in April from 53.9 in the previous month.

The foreign broker has downgraded Indian equities to ?underweight? from ?neutral.? The move comes amid rising crude oil prices driven by the Middle East conflict. Brent crude is up over 40% and trading above $100 per barrel. Higher oil prices are expected to raise inflation and slow growth. It said earnings forecasts may be revised lower. A 20% rise in crude could cut earnings growth by 1.5%.

The brokerage also flagged risks of rupee depreciation and continued foreign investor outflows. Concerns around IT sector demand remain. While domestic inflows are supportive, valuations may look expensive if earnings are downgraded. The brokerage said selective opportunities remain, but the broader outlook has weakened.

Buzzing Index:

The Nifty PSU Bank index declined 2.25% to 25,927.35. The index increased 2.55% in the past four consecutive trading sessions.

Union Bank of India (down 7.8%), Bank of Maharashtra (down 2.75%), Canara Bank (down 2.66%), Indian Bank (down 1.98%), Bank of Baroda (down 1.92%), Punjab National Bank (down 1.7%), Central Bank of India (down 1.68%), Bank of India (down 1.52%), Punjab & Sind Bank (down 1.49%) and State Bank of India (down 1.1%) declined.

Numbers to Track:

The yield on India's 10-year benchmark federal paper rose 0.32% to 6.945 compared with previous session close of 6.923.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 94.1125 compared with its close of 93.7850 during the previous trading session.

MCX Gold futures for 5 June 2026 settlement declined 0.38% to Rs 152,073.

The US Dollar Index (DXY), which tracks the greenback's value against a basket of currencies, was up 0.08% to 98.67.

The United States 10-year bond yield advanced 0.58% to 4.319.

In the commodities market, Brent crude for June 2026 settlement jumped $1.87 or 1.83% to $103.78 a barrel.

Stocks in Spotlight:

Speciality Medicines hit an upper limit of 5% after the company announced a new export order from an international client.

Jio Financial Services rallied 4.61% after the company said that it has entered into a binding agreement with Allianz Group (Allianz) to form a 50:50 primary insurance joint venture (JV).